Rockspring announces first close of UK Value Fund (UK)

Rockspring Property Investment Managers Limited announces the first close of Rockspring UK Value Fund, a closed ended fund focused on opportunities arising from market repricing across the UK commercial property sector, having raised £152 million (approx. €169 mln.) from five investors from the UK and the Continent. The Fund, which has a total target equity raise of £400 million, will have the capacity to spend £600 million after gearing and the first close will now allow the Fund to begin investing immediately.

UK Value provides investors with access to Rockspring's expertise as it takes advantage of acquisition opportunities arising from increased commercial property yields that are now cheaper than the five and 10 year historic averages, market mispricing, a limited availability of debt and the opacity in the UK real estate market. The Fund will build a diversified property portfolio at attractive pricing levels from which there should be scope for near term capital appreciation and income growth.

The Fund will have the ability to invest in direct commercial property, joint ventures with experienced partners, pooled/unitised property vehicles and companies owning specifically targeted assets. The Fund will focus on small to medium sized assets primarily in the office, retail and industrial sector and will target assets which will generate above average returns in themselves. There is no pre-determined geographical or sector allocation, allowing a flexible approach with a broad range of target assets whilst maintaining an appropriate diversification of risk. Each possible acquisition will be evaluated for its ability to offer either an existing relatively high cash yield or the potential for yield growth enhanced by a modest level of gearing.

Neal Shegog, Partner of Rockspring and head of asset management, is the Fund Director of the UK Value Fund and Richard Bains is the Fund Manager.

Robert Gilchrist, Chief Executive of Rockspring, commented: "Our ability to raise equity in these challenging conditions is a reflection of the strong track record of our senior management team in managing through previous market cycles. As a specialist property fund manager celebrating 25 years in operation, we will make full use of our extensive and experienced UK transaction team to source only the best opportunities in the UK market, as well as drawing on our skilled asset management platform to maximise the capital value and income of assets once acquired."

Neal Shegog, Fund Director for UK Value, commented: "The UK commercial property market has undergone a significant re-pricing process since the peak of the market in June 2007. Asset price adjustments, together with the encouraging underlying property fundamentals suggest that the UK market is not only perceived to be offering the best value amongst continental markets but is proving increasingly attractive against other asset classes. In addition, as markets tend to overshoot on the way down as well as on the way up, we believe that clear opportunities are emerging to buy assets at below value. This is likely to occur through, amongst other things, a lack of available debt and distressed selling. With the benefit of Rockspring's strong UK presence, we look forward to identifying opportunities which will deliver exceptional returns to our investors."

Source: FD

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